The Beijing Sci-Tech Report will now accept bitcoin from subscribers. Image: iStock
Image: iStock

China’s central bank is stepping up its crackdown on cryptocurrency exchanges.

In a statement on Thursday, the People’s Bank of China (PBoC) warned that it intended to “dispose of” entities allegedly trading cryptocurrencies such as bitcoin illegally, Cointelegraph reported.

“Once it is discovered, it will be disposed of immediately, and it will be prevented from happening early,” a translation of the statement reads.

The move was in response to increased trading activity following President Xi Jinping’s public endorsement of blockchain technology last month, it said.

Also read: China’s central bank is promoting blockchain

Multiple rumors have been circulating about a crackdown on legitimate cryptocurrency businesses with offices in China. On Thursday, attention focused on alleged police raids on the offices of Binance and Bithumb, something both companies later denied.

Bitcoin plunged on Friday as the news appeared to rattle markets, sliding almost 10% before bouncing off support at around $7,000.

Meanwhile, the city of Shenzhen announced a probe into local cryptocurrency trading operations, again spearheaded by the PBoC. However, industry players including Binance CEO Changpeng Zhao insisted that the focus of the crackdown was nefarious actors and that stricter regulation would ultimately benefit the crypto space.

He tweeted, “This is actually a very good thing to happen, cleaning up the industry of scammers and fraudsters.”

However, in its latest statement, the PBoC, which is preparing to launch its own digital currency, expressed the official government position of favouring blockchain but opposing cryptocurrency more clearly than ever.

“Investors should be careful not to mix blockchain technology with virtual currency,” it continued, paraphrasing similar warnings published in the People’s Daily, a Beijing mouthpiece, late last month.

Also read: China to roll out digital yuan ‘in 2-3 months’

At the time of publication, a sell-off apparently triggered by China’s crackdown had pushed the price of bitcoin down to $7,184, according to CoinMarketCap, a website that provides crypto market data. The overall market cap was down to $196,519,397,708.

Many investors were clearly alarmed, but some veteran market observers appeared to be unfazed by the sudden drop in the value of cryptocurrencies, which are notoriously volatile.

Leading crypto YouTuber Lark Davis of The Crypo Lark channel told investors they should view the price plunge as an opportunity to “stack sats” on the cheap.

He tweeted, “Annual china #bitcoin pump and dump, nothing to see here folks, stack sats and chill”

Fellow YouTuber Alex Saunders of Nuggets News shared Lark’s view, dismissing China’s move as an act of market manipulation that has been seen before.

He tweeted, “You’d think after banning #bitcoin every year for 6 years so they can buy more, people would realise what’s going on. China only wish it’d work as well for their #gold stockpiling strategy. The annual China ban is alive & well!”

Leave a comment

Your email address will not be published.